In 2021, Pentana Stanton Lawyers represented the Williamses, a retirement-age couple who lost their superannuation to Brighton financial planner Terence Rio Rienzo Nugara.
After our team, led by principal solicitor Jesse LaGreca, recovered their superannuation by pursuing Nugara, Nugara’s company Skynet Financial Services Pty Ltd, the Williamses’ accountant, and Nugara’s AFS licensee, we also sought an additional damages assessment against Nugara and his company. The result: the Williamses walked away with their superannuation (plus interest) and an additional $50,000 in damages.
But that money had only been recovered through insurance through the relevant AFS licensee. Nugara himself – the alleged mastermind behind more than $9 million in superannuation theft – fled Australia in 2019 and spent the next three years living a life of luxury with his former clients’ money in Bali, Costa Rica, and Mexico City.
Then, at the tail end of October 2022, Nugara got complacent. He returned to Australia and was promptly arrested at Melbourne Airport on 35 counts of obtaining financial advantage by deception. Now, the 49-year-old financial planner, who robbed the elderly and his close friends, is in custody pending a committal hearing in January 2023. His bail was denied.
How Did Nugara Operate?
Nugara’s modus operandi was simple and effective. He gained his clients’ trust by leveraging his position as a representative of a large financial organisation. Many of his victims were also friends and family.
Then, with credibility established, he pitched investments in luxury serviced apartments. Nugara promised to help his clients set up self-managed superannuation funds and invest their super in projects across Malvern, Sandringham, Glen Iris, Kew, and Bali.
The catch: as soon as each client granted Nugara access to their super, he transferred the money – ranging from $150,000 to $3.4 million – into his personal accounts. It was only when the investors started wondering about their returns that Nugara’s fraud was uncovered.
How We Recovered Our Clients’ Money
The basis of the Williamses’ claim against Nugara and the three related parties was that, among other things, the relevant parties had engaged in tortious deceit, misleading and deceptive conduct, and negligence.
During our investigation, we found that:
- our clients’ superannuation had never been invested in the proposed developments;
- the proposed investments were non-compliant with the Corporations Act 2001 (Cth);
- our clients hadn’t been provided with product disclosure statements (PDSs) or any other kind of relevant material – and thus weren’t fully informed about their investment; and
- there was no evidence to suggest that any assessment was undertaken to ensure that the advice given was right for our clients.
By providing the court with evidence that supported those points and only relevant legal principles, we were able to recover funds on behalf of our clients.
Keeping Sticky Fingers Out of Your Super
Nugara has been caught, but, sadly, superannuation and investment fraud are hardly isolated incidents in Australia. With plenty of other bad-faith actors still in the financial system, it’s important that you take steps to protect your retirement.
Check Investments Before Committing
There is no such thing as a legal ‘get rich quick’ scheme. If someone is promising you very high returns in a short timeframe, it’s likely illegal activity or a scam.
It’s also important to remember that risk and returns generally correlate – the higher the returns on an investment, the higher the risk. Returns on very low-risk assets like bonds, for example, are around 4% per annum, whereas ETFs, which are still considered low-risk, are around 8% per annum. Alternative asset classes – higher-risk investments that include private debt and property – can yield even better returns, with private debt returns typically sitting around 10–11% and residential development returns at 20–25%.
Very high-risk investments – such as cryptocurrencies and venture capital – can yield much higher returns, but, even for investors with sophisticated market understandings, are incredibly volatile. It’s also important to keep in mind that, for certain digital asset classes like crypto, regulation is currently minimal. Fraudulent parties may also be based overseas, which can make recovering any lost or stolen investments very difficult.
To make sure you aren’t being scammed, always read the product disclosure statement (PDS) before signing anything, granting accesses, or transferring money. If you don’t understand parts of the PDS, consult an independent financial adviser.
Check the Credentials of Investment Managers
Property funds and other similar investments are normally classed as managed investment schemes, which means they normally have a corporate investment manager and a trustee. The exact details of these parties should be clearly stated in the information memorandum, PDS, and/or trust deed that you receive before you invest.
Check to make sure that the details of the investment manager and other responsible parties match the details available from government registers like ASIC’s registers and the ABR’s ABN lookup tool. You can also ask your solicitor to investigate the legitimacy of the investment. While they can’t give you financial advice, they may be able to confirm details about the responsible parties.
Get Unbiased Advice
It’s generally inadvisable to take advice about investments or financial products from parties that stand to gain from making a recommendation. If you’re not sure whether your financial adviser, accountant, buyer’s advocate, or broker is unbiased, talk to your solicitor. They’ll be able to direct you to an unbiased adviser who can help you determine what is and isn’t in your best interests.
What to Do If You’ve Been Scammed
If you suspect you’ve had money stolen, try contacting the party or parties first. If they make excuses or if you can’t reach them, get in touch with a solicitor.
There are some legitimate instances, like the lock-in periods common to managed funds, where you may be unable to redeem your investment, but it’s always a good idea to get professional advice about your situation.
Our experienced commercial law team regularly advocates for Australians across a range of jurisdictions. We normally aim to resolve issues of financial fraud through out-of-court negotiation, but, if the other parties are unwilling to talk or can’t be reached, we’ll help you recover your money by commencing court proceedings.
Talk to us to find out how we can help.